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A Better Politics—A More Enlightened Economics

We know what makes people happier. Living in a country with higher levels of well-organised collective spending on health, social insurance and employment protection produces a happier population. In his new book A Better Politics, Danny Dorling asks what policies emerge when we take happiness as the priority for politics and economics.

American political scientist Benjamin Radcliff recently used statistics to show that: ‘The differences in your feeling of well-being living in a Scandinavian country (where welfare programs are large) versus the US are going to be larger than the individual factors in your life. The political differences trump all the individual things you’re supposed to do to make yourself happier – to have fulfilling personal relationships, to have a job, to have more income. The political factors swamp all those individual factors. Countries with high levels of gross domestic product consumed by government have higher levels of personal satisfaction.’ Fewer economists now think that being taxed as little as possible results in people better enjoying ‘life, liberty and the pursuit of happiness’.

Economist John Helliwell says: ‘If people really are happier working together for a worthy purpose, this exposes a multitude of win-win solutions to material problems, thereby building community while meeting material needs’. Being materially much better off than our parents were has made most of us no happier. The new science of happiness economics does not ask people what they think makes them happy, but studies how and when happiness levels change and why. This has the potential to subtly but profoundly alter what we try to use politics to do. Political priorities should be driven by what makes society more likely to be actually rather than superficially happier. This article sets out to examine what those new priorities might look like in a number of different areas, drawing on the policies other affluent countries use to promote these outcomes.

Health and life

It seems obvious that health and long life are two fundamental foundations for happiness. But recently, life expectancy for people in the UK aged over 60 has stopped rising. This may be related to the impact of austerity in the UK: cuts to home visits to the vulnerable, reduction of pensioner income credit and struggles to survive for residential homes. Are the frailest – elderly women – ‘the canaries in the mine’? Currently this is speculation, but in retrospect people may say ‘wasn’t it obvious?’ People’s happiness plummets when others close to them die, even if they are old. ‘Unnecessarily’ early deaths cause widespread distress. The death of a parent is more harrowing when you feel you should have been able to do more to help them.

The UK is practically at the bottom of the Western European league tables for both infant and child mortality: infant death rates are highest in the poorest UK inner cities and across Northern Ireland. This is, quite simply, because the UK has the highest economic inequalities between rich and poor in Europe. These stark economic inequalities profoundly affect a child’s very chances of growing up. Children born in Sweden are half as likely to die in childhood as children in the UK. There are no causes of death among children significantly more frequent in Sweden than in the UK. How society is organised affects all causes of death, from infection, to congenital malformation, to road crashes. UK children are twice as likely to be killed on roads compared to children in France, Norway or the Netherlands. None of these individual deaths are ‘expected’, but the number of them is very predictable year on year, as is the effect on the surviving family and friends.

Dealing with what life throws at us on an individual basis is very different from dealing with it on a collective basis. We can work together to increase our overall chances of well-being and minimise the risk of the harm that could befall any of us – we have only to look to the rest of Europe to learn. Some countries levy fines for speeding at a rate proportional to income, not fixed. In 2010 in Switzerland a wealthy motorist (and a repeat offender) was fined £180,000 for driving his Ferrari through a village at 85mph. Not only is this an effective deterrent, but it also helps raise money that would be better spent on public goods than on fast cars. Owning a fast car is permitted almost everywhere, but driving it too quickly is not tolerated in those places that better know the value of life over wealth. There are other measures that we could take: reducing speed limits, promoting public transport and making cycling and walking safer all reduce road deaths.

It is shocking when people commit suicide or die from drug misuse. And it is also possible to reduce these deaths. But recently rates of death from these causes have been rising in Britain. We dislike talking about mental illness and ignore much avoidable suffering. Of the 11 affluent countries for which comparable statistics exist, the UK is second only to the US in terms of how common mental illness is. There is nothing inevitable about these rankings. The UK also does badly when we look at drug-related deaths. Of 32 European countries, the UK has the fourth highest rate of drug-induced death amongst those aged 15-64. Between 2012 and 2014 there was a 64 per cent increase in deaths involving heroin/morphine and a 46 per cent increase for cocaine deaths. These rises coincided with the aftermath of the eco- nomic crash, growing inequality and rising austerity. The Conservative government constructs drug-related deaths as individual tragedies, implying that no collective remedy can help: ‘... any death related to drugs is a tragedy ... Our drugs strategy is about helping people get off drugs and stay off them for good, and we will continue to help local authorities give tailored treatment to users’. That same government indirectly drug addiction services, as well as numerous other services. Worsening times drive more people to drink and drugs. Minimising the harm that mental illness and drugs do to our society’s happiness is a collective issue.

Across the UK today, small campaigning groups are working to reverse the rising trends in drug overdoses, in road deaths, in early childhood mortality, and in preventable deaths amongst the elderly. The reason they give for their work is simple: the effects on those who are left behind, on the survivors. We should learn from our mistakes and from other countries where such deaths are rarer than in the UK. Most importantly, we urgently need to know why so many more deaths occurred in England and Wales in 2015 as compared to 2014, a rise of at least 4.6 per cent, even allowing for population growth.

Housing and wealth

In 1983 your chance of owning your own home was over 70 per cent for people aged between 29 and 49. In 2012 the lucky group who had a 70 per cent or more chance of owning their homes were aged 58 to 85. Home ownership and rapid house value inflation was a ‘bonus’ won by just one generation. And yet a secure home is one of the most important factors influencing wellbeing. We need to make it available to all.

In the distant past most people did not buy their own home. Even in 1983 a majority of those aged over 50 were renting from the local council or from the remnants of the old private rented sector. Council housing, and regulated private sector rents, had put slum landlords out of business. People saw the quality of their housing improve. Now, as a result of the ‘right to buy’ policy, the total social housing stock is much smaller. Quality today improves only for a minority, while many others live in increasingly overcrowded property, often poorly maintained by its private landlord.

The mortgage market grew in the 1980s, along with a new private rented market for students and young professionals. By the 1990s fewer older people rented, but younger people were increasingly unable to get mortgages and the private rented sector expan- ded rapidly. With the economic crash in 2008, it became even harder for first-time buyers, but surprisingly easier for buy-to-let landlords. Most people aged 25 to 50 were renting again, but now mostly from private landlords. Private tenants doubled between the 2001 and 2011 censuses, from 5 million to 10 million across the UK.

Since 2010 council tax benefit has been cut all across the UK, and rent, gas and electricity costs have gone up. A quarter of British households, mostly with children, can no longer pay for rent, fuel and food and manage to save at least £10 a month. Relying on charities to help feed the poorest through food banks shows that this government views such activities – being able to live a decent life – as discretionary.

People will go without food and adequate heating before they fail to pay the rent. And yet in London, court summonses for not paying the rent doubled from 7,283 in 2013-14 to 15,509 in 2014-15, and there was a 50 per cent increase in the use of bailiffs. In the UK you pay for your own eviction: £125 in court costs and £400 in bailiff’s fees.

Over half a million children in London are now living in poverty. Most of their parents are now privately renting. When their families are evicted, or just move because they cannot afford the rising rents, the children also often have to move school, thus losing friends. Children in poverty and in private rented accommoda- tion move, on average, more than once every three years. London’s recent amazing state school exam result improvement may well soon suffer.

Our government needs to accept its responsibility for the quality and security of rented housing and the quantity of socially rented housing, become involved in rent regulation and bring under control the frenzied buying of properties by buy-to-let landlords. The standard length of private rented tenure in the UK should be three years, or five years for people with, or who subsequently have, children. Rents should be fixed during this period. Social housing rents should not be more than 30 per cent of disposable income. Tenants such as students could leave their tenancy earlier, but landlords could not insist that they do. Tenants should have the right to improve persistently substandard accommodation, deduct the cost from their rent, and extend the length of their tenancies in proportion to how much they have had to spend. That would ensure our housing stock was improved. Existing laws are simply not good enough.

Housing still needs to be built, but in recent years the private sector has failed to build despite sky-high house prices. A great deal of building would be better coordinated if it were done under the supervision of the state, which can coordinate transport links and other infrastructure. We need attractive retirement apartments with lifts near to where people’s children live, and homes in and near cities where people will not need so many cars.

Housing has made some people very rich – though often only on paper. Since 2010, 207,000 more people in the UK became paper millionaires, mostly because the market value of their property had risen; this is potential wealth that can only come from the next generation in higher rents or huge mortgages. High property and private pension wealth do not make people happier. Recent surveys show that quite small amounts of liquid wealth correlate with higher personal well-being – having savings for a rainy day makes people more secure and happier. Yet a quarter of UK households can save nothing at all, and another quarter almost nothing. And having a house whose value has topped a million pounds contributes little to a sense of real happiness.

Above the paper millionaires are those receiving each year a share of the £42 billion paid in bonuses in the UK. Mostly these are bankers or individuals who work in closely related financial service industries. Most bankers feel their own bonus is small compared to the hundreds of thousands of pounds received by a few. And even these few feel poor compared to the wealthiest 1000 families in the UK, who have doubled their wealth holdings since 2010. Self-perceptions of wealth are all relative.

The UK is now ranked third, just below the much more populous China and the US, in terms of the ‘ultra high net worth individuals’ who live there – those with wealth worth over $50 million. Worldwide inequities between those at the very top and the rest are rising increasingly rapidly. As the chief executive of Oxfam said: ‘This is the latest evidence that extreme inequality is out of control. Are we really happy to live in a world where the top 1 per cent own half the wealth and the poorest half own just 1 per cent?’

Annual wealth taxation is needed. Property taxation should be progressive. A flat tax on the value of property owned or proportional to total land value are less radical options. Saving small amounts should be encouraged and property speculation discouraged. The Child Trust Fund, now cut, reduced some wealth inequalities. Less inequality results in more security for all. Taxing the rich properly would make owning more and negotiating higher salaries and bonuses much less attractive. All other countries in Europe allow fewer than 200 people working in finance to earn over a million Euros a year. More than 2000 bankers in the UK earn more than this. There is nowhere for them to go – the USA cannot afford them.

The quickest way to relieve the housing crisis and reduce evictions is to introduce policies that encourage people to sell their property ‘investments’, discourage second home buying and promote downsizing when children leave home or partners die. Very large properties could again be subdivided into flats. This happened before when economic inequalities fell – without coercion.

Disincentives to hoard housing (such as increasing taxation on empty homes to make them a bad investment and ensuring that capital gains tax applies to all property) would ensure that the value of housing begins to fall towards normal European level. Housing in the UK needs to be for homes again, not a ridiculously ‘clever’ investment.

Security and relationships

Out of 34 countries with comparable data, the UK has the fourth highest annual divorce rate. Cohabiting relationships are even less likely to last. The number of children in one-parent households is high by international standards. Financial pressures and overwork make sustaining relationships more difficult. The strains of poverty and poor housing can help trigger rows and domestic violence. Over 40 per cent of people convicted of a crime and imprisoned have witnessed domestic violence at some point during their childhood. All these social issues are interlinked.

People need space and time for meeting people and forming relationships. Opportunities to find new friends are cut when our working and commuting hours rise. Policies over working hours and options have implications for our relation- ships. It was politics that got us better schools, housing and hospitals – all things that were once thought of as private affairs. Our lack of leisure is a political problem.

Prisons are the extreme example of how current government policies harm our relationships with each other. 7 per cent of our children leave school with a parent having been imprisoned. We have the most prison cells per head of any country in Europe. A new large-scale, profit-making, private-sector-led prison-building pro- gramme is planned. The Centre for Crime and Justice Studies quote senior prison officials who explain: ‘At their very centre, prisons are unhealthy and damaging places for both prisoners and prison officers. ... if we need fewer police and more social workers then government should plan for that. Such an approach could lead to a radical downsizing of the prison estate with the closure of old prisons and no need to build replacements.’ Prison damages the relationships that matter most to people, including between parents and children. Many see mass imprisonment as necessary to maintain law and order, but 46 per cent of prisoners are re-convicted within a year of release.

Where do we put our resources? We have only 50,000 family doctors, but 280,000 qualified accountants. What for? Nowhere else in Europe trains so many bean-coun- ters. Too few young people are studying for medicine, nursing, teaching or social work. We regularly employ so few doctors and nurses that, in order to achieve minimal levels of cover, others are frequently employed – less effectively and more expensively – on a temporary basis.

We need some accountants and some bankers, but in the UK, as Prem Sikka, Professor of Accounting at the University of Essex, explains: 'If anything, accounting firms have undermined national tax revenues and used their expertise to excel at money laundering, bribery, corruption and other antisocial practices.’ Why do so many clever young adults join the financial services sector – a sector that, not by productivity but by sleight of hand, can make such profits and pay so well?

If we took the City of London out of the UK economy, would this have a massive negative effect on Britain’s ability to pay for social services and the NHS? Other Western European countries, which are less reliant on their financiers for their tax-base, fund their health services and social services far better than we do in the UK. We need more people doing work of real value, rather than work that includes so much of no benefit to society.

Very economically unequal countries employ more people to audit others. An untrusting country has more crime and uses more lawyers routinely in business and in the media. The US has the highest numbers of lawyers per head. In recent decades there have also been huge increases in the employment of security guards. The more economically divided we become, the more anxious we become and the less we trust others.

Levels of anxiety are rising in the young, especially in countries becoming more economically unequal like the UK, and we’re taking more antidepressants than ever. People are increasingly concerned about their own futures, and about the future of their children, their neighbourhoods and their country.

Leaving your economy to be shaped by ‘the market’ results in it being shaped by fear and greed, short-term profit maximisation and the Devil take the hindmost. We need better market regulation, less preoccupation with finance and fictions of ‘wealth creation’ and more ‘happiness preservation’. It is not safe to base an economy on debt-fuelled consumption, and on enticing more of the world’s super- rich to settle, study and securitize their assets here. We need government initiatives to reduce the amount of personal debt, overwork and stressful commuting, and to increase our personal financial security and the security of our relationships. Ultimately, after our physiological needs, safety and security are looked after, it is the quality of our relationships that matters most to our happiness. https://www.lwbooks.co.uk/renewal-subscriptions

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About the authors

Danny Dorling Danny Dorling is the Halford Mackinder Professor of Geography of the School of Geography and the Environment of the University of Oxford. He is the author of Injustice: Why Social Inequality Persists (Policy Press, 2011) and The No-Nonsense Guide to Equality (New Internationalist, 2012).